The SQM Advantage

Supplier Quality Management is an increasingly important regulatory focus, and as the need for control of quality increases, SQM is becoming a competitive advantage for complex manufacturers, who have to assure the quality of their supplier’s products and the suppliers of their suppliers. The AS9100 Revision D says:

The organization shall require that external providers apply appropriate controls to their direct and sub-tier external providers, to ensure that requirements are met.

This is the state of quality demands in today’s increasingly networked and globally distended marketplace. The fact is the way products are built has changed over time, and continues to change as the marketplace evolves. As manufacturers are increasingly reliant on global suppliers, the need for quality management of those suppliers becomes more critical and difficult to manage.

For complex manufacturers, in particular, the challenges of staying abreast of changing and often volatile demand combined with the imperative to innovate puts margins and profitability under constant pressure. Having an effective supplier quality management (SQM) strategy in place can save significant time and money expended to solve quality problems caught in initial supplier onboarding, inbound inspection, traces, and internal audits. Because more than 80 percent of manufactured goods utilize purchased parts, supply chain performance— and quality— is key to ongoing success. This is why SQM is increasingly top-of-mind for manufacturers.

The Competitive Advantage of Supplier Quality

Quality Digest notes the correlation of SQM and market leadership: “Many market leaders are executing supplier quality management so well that it has become a source of differentiation from close competitors. The strategies employed to achieve this level are always maturing and building on past successes.” Quality Digest analysts cite five supplier quality management practices as fundamental to staying competitive:

• Build an integrated IT architecture that extends deep into the supply chain.
• Implement a supplier risk scorecard solution that’s standardized across the enterprise.
• Identify a list of metrics and KPIs to monitor supplier performance.
• Create a collaborative environment and establish processes for managing supplier compliance and audits.
• Hold suppliers more accountable for the quality of their suppliers’ products.

Adopting SQM Practices

LNS Research discusses the growing importance of technology in SQM, noting that quality leaders “were able to differentiate their products, using the best processes, perspectives, and technologies to establish a position of SQM market leadership.” LNS also finds that many companies are stuck in an old mindset and that the market majority is not yet prioritizing SQM technology. “As the industry matures, it should recognize the value of technology to people and process.” The analyst draws a number of interesting conclusions about the adoption of SQM:

1. 1. As noted above, despite an increased focus on SQM, the market majority has yet to prioritize its enabling technology.
   2. Market leaders continue to invest in that technology, creating an expanding gulf between leaders and laggards.
   3. Nonetheless, the rapid advance of SQM technology is leveling the playing field.

The fact is that as manufacturing evolves toward its next revolutionary iteration, however, it is termed (i.e., Industry 4.0, Smart Manufacturing, Digitalization, etc.), supplier quality management will be essential to simply sustain organizations, if not differentiate them as leaders. The “leveling” of the playing field is the acknowledgment that the game has changed.

SQM Solutions

As such, effective SQM solutions will have to feature the essential deliverables that ensure that SQM meets its strategic goals in today’s increasingly complex, rapidly changing market. These should include those delivered by iBase-t’s Solumina QMS functionality:

1. 1. • Real-time visibility across the enterprise and its value chain
      • Quality requirements and inspection planning
      • Collaborative quality
      • Extensive engineering support
      • Detailed tracking of suppliers’ performance
      • Configured escalation rules
      • Compliance with relevant standards and regulations